Key Insights for Home Buyers and Sellers going into 2024

Dated: December 3 2023

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Greetings, valued clients! Here's a breakdown of the latest update from the Canadian Real Estate Association (CREA) regarding the housing market forecast for 2023 and a glimpse into 2024.

Recent Market Trends:

After a lively spring, national home sales have eased in recent months, influenced notably by rate hikes by the Bank of Canada in June and July. Uncertainty about the duration of high-interest rates has also played a role.

Traditionally, the spring market is most active and tends to wind down over the summer. However, there's often a renewed interest in the fall. New listings surged post-Labour Day, but this influx hasn't translated into a spike in sales.

The national sales-to-new listings ratio dropped from near 70% to 50% in the last five months. Prices, especially in Ontario, have slowed considerably and even reversed in some cases.

Forecast Adjustments:

Weaker sales and pricing trends, coupled with ongoing market softness and sustained higher interest rates, prompted CREA to adjust its forecast for the remainder of 2023 and into 2024.

The main risk to this forecast lies in the data the Bank of Canada is monitoring and its impact on the policy interest rate. The current assumption is either no more hikes or, at most, one more, with a potential indication of a future decrease.

2023 Projections:

Approximately 449,614 residential properties are expected to change hands via Canadian MLS® Systems in 2023, marking a 9.8% decline from 2022.

The national average home price is forecasted to decrease by 3.3% to $680,686 in 2023. This adjustment is primarily due to lower sales in Ontario and British Columbia, the two most expensive provinces for real estate.

Looking to 2024:

A rebound in national home sales is anticipated, with a 9% increase to 490,257 units in 2024. This is expected as interest rates move closer to a downward trend, aligning with long-term market trends.

The national average home price is forecasted to recover modestly by 1.5%, reaching $690,916 in 2024. Despite monthly volatility, this would mark the fourth consecutive year within the $680,000-$700,000 range.

Regional Variances:

Ontario foresees minimal price growth at +0.2%, while other provinces anticipate modest increases ranging from 1% to 2.5%.

In summary, while the market has seen adjustments, the forecast suggests a potential rebound in 2024. If you're considering buying or selling, let's discuss how these trends may impact your real estate goals. As always, I'm here to guide you through these exciting market dynamics!

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Martin Chettle

Taking a personable approach, while maintaining professionalism, has allowed Martin to build and maintain solid relationships, which explains why his business has grown mostly from referrals and repea....

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